Biotech Preview

It’s been a tough year for biotech investors. The big caps such as Amgen (Ticker: AMGN) and Genentech (Ticker: DNA) sold off, while some of the mid cap players like Genzyme (Ticker: GENZ) and Gilead (Ticker: GILD) generated decent returns. And how can anyone not enjoy the roller coaster ride with Biogen Idec (Ticker: BIIB)!? I would continue to hold onto the winners from 2007 into 2008. You know what they say; the trend is your friend. We’ll see a glimpse as to what 2008 will look like in the upcoming JP Morgan Healthcare conference. The conference starts on January 7th and many companies will be giving preliminary Q4 and 2008 guidance. So stay tuned…

Arb Play In Harrah's

As mentioned in my previous post, I've been playing around with Harrah's Entertainment (Ticker: HET). This company is in the process of being taken over for $90 per share in cash. So here are all of the trades I've made in Harrah's Entertainment:

11/26 Bought @ $87.03
11/28 Sold @ $87.76
11/29 Bought @ $87.90
12/06 Sold @ $88.14
12/13 Bought @ $87.08

I'm just going to hold onto the last batch of shares purchased and wait for the deal to close in early 2008 (probably sometime in January) and receive the $90 per share in cash.

My next arb play is Penn National Gaming (Ticker: PENN), which is trading around $59 and is being taken out for $67 per share in cash. This deal is expected to close in mid 2008.

Just a little warning... I'm not hedged with these merger plays so if the deal doesn't go through, I'm toasts!